RBI fines Axis, ICICI & HDFC Bank for KYC norms breach

Axis, HDFC Bank, ICICI Fined for Violating RBI Laundering Rules
June 10, 2013
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June 11, 2013

RBI fines Axis, ICICI & HDFC Bank for KYC norms breach

Axis Bank has been fined R5 crore, HDFC Bank will pay R4.5 crore and ICICI Bank will pay R1 crore in penalty. The government had pushed for steeper fines on the three banks, however, the RBI had hinted that fines would be levied based on the existing norms.

The penalty was imposed after the RBI scrutinised the books of accounts, internal control, compliance systems and processes of the three banks at their corporate offices and some branches in March-April 2013.

The scrutiny of these three banks revealed violation of certain regulations and instructions issued by Reserve Bank of India, the central bank said.

The RBI further detailed that in its investigation it found that the three top private banks in the country were not adhering to certain know your customer (KYC) norms and anti money laundering (AML) guidelines like risk categorisation and periodical review of risk profiling of account holders. The central bank also found that the banks were not filing cash transaction reports (CTRs) in respect of some cash transactions and were selling gold coins for cash beyond R50,000.

The statement also said that the banks were not obtaining permanent account number (PAN) card details and were not verifying source of funds credited to a few non-resident ordinary (NRO) accounts. However, RBI said it has not yet found any substantial evidence of money laundering. The investigation did not reveal any prima facie evidence of money laundering. However, any conclusive inference in this regard can be drawn only by an end to end investigation of the transactions by tax and enforcement agencies, the statement said.

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